Insolvency Law Reform: Balancing Debtor Protection and Creditors’ Rights – Comparing the UK and Saudi Arabia

Abstract

The dissertation discusses the importance of changing insolvency laws. It contends that people who owe money should be protected, but creditors should also have rights. The study considers how bankruptcies work in Saudi Arabia and the United Kingdom. Both legal systems are based on different ideas (Sharia Law in Saudi Arabia and Common Law in the UK), introducing significant differences in how fairly and well these processes work. One issue under debate is whether the current laws balance the needs of creditors and debtors. Many people believe that present insolvency laws favour creditors and thus lead to strict punishments for debtors and long healing processes that cost a lot of money for lenders. If this is true, then changes are needed to ensure that both groups are treated fairly. This is salient as both the UK and Saudi Arabia struggle with bankruptcy-related problems. By performing a comprehensive literature review and a qualitative analysis of secondary data, this study identifies the strengths and weaknesses inherent in both countries’ insolvency systems. In Saudi Arabia, the new bankruptcy laws were implemented in 2018. In the UK, the Insolvency Act 1986 is aimed at ensuring that creditors are repaid as much as possible to keep the economy working well; however, the process can be slow and costly. This study examines how the UK could do more to help bankrupt people and businesses regain their feet. It also shows that people need to know more about how bankruptcy actually works so they do not judge persons who are going through it. This dissertation brings together ideas from around the world to determine which parts of insolvency law work best, with the end goal of making the law better as a whole. By suggesting ways to change the laws, this study hopes to be useful to lawmakers who are thinking about changing insolvency laws. Such changes can make things better for both the people who owe money and the people who are owed money. This report shows what parts of current bankruptcy law are good and what parts need work, making it of interest to policymakers. It also compares the laws of these two countries to show what can be done to ensure that both sides are equal. This should help lawmakers make new laws that are fairer and more efficient